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Richard Branson: "Create a European army - and privatise Radio 1"

The Virgin entrepreneur and adventurer talks to David Miliband about tax avoidance, Bob Diamond, why Europe needs a joint army and why he’ll never back any one political party.

I first met Richard Branson while canvassing in west London in a by-election in the 1980s. He was polite but non­committal. He said he couldn’t speak for his wife – but she was in the bath and so would have to be marked down as a “maybe”. I wanted to interview him because even though many people think the political world is all about tactics, he has made a name challenging incrementalism. We met at the Running Horse pub in central London, after a dinner with the former US president Jimmy Carter, Archbishop Desmond Tutu and the former president of Ireland Mary Robinson to mark the fifth anniversary of the Elders.

DM You’ve created the Elders with Nelson Man­dela as your guide. Why?
RB The Elders partly came from being an entrepreneur for many years and seeing quite a number of conflicts around the world, starting off with the Vietnamese conflict. I left school and started a magazine and, like a lot of students of my age [thought], the magazine was designed to campaign against that and the Biafran war.
DM Do you think the Iraq war was the same kind of mistake as Vietnam?
RB Absolutely. And I do believe that there should be other ways of resolving conflicts, rather than to have to go and kill and maim several hundred thousand Iraqi people. So, to have some leaders come in and try to bring some [reason] to the situation makes sense.
DM Tell me about bold, brassy business goals and bold political goals. What’s the difference?
RB I think it’s easier for an entrepreneur to have long-term goals. This is our 27th year of running Virgin Atlantic and we can think 20 years ahead. Obviously one of the difficulties of a democracy is that people start talking about a politician overstaying their welcome after eight years, let alone . . .
DM Shall we recommend longer terms for politicians?
RB I certainly think there should be half the number of politicians and they should all be paid twice as much money.
DM What about the point that there is a void in political leadership today? Do you recognise that description?
RB America is the country that people look to for leadership in a lot of situations and there seems to be a void of brave leadership from both the Republicans and the Democrats. I do believe that Israel-Palestine is such a case. We have this thorn in the side of the world. I just think it’s extremely dangerous and it’s patently immoral and wrong and needs to be addressed, and that takes bold leadership.
It is the same with drugs. If you talk to any individual politicians, they will admit that thecurrent war on drugs has been a failure and that they should change the current laws, but they’re not brave enough to do so. Therefore, in the meantime, millions of people around the world are affected by the war on drugs. If I’ve got a failing business for 40 years, I don’t carry on – I change the strategy. You don’t even necessarily have to say “legalise it”. Just treat it as a health problem, not a criminal problem.
DM Do you think that the non-democracies govern themselves better?
RB China runs its country a bit like a business, but, having said that, I would always much prefer the slight muddle of a democracy.
DM In the past year or so, you have become a banker [with the takeover of Northern Rock by Virgin Money]. What’s your reflection on what’s seen as a crisis of culture in banking?
RB I learned my lesson when I was 21 years old when I had a rap on my knuckles for trying to save some money on exporting some records and not paying my taxes properly. And I decided that I wanted to sleep well at night. I think most people who got involved in these problems would much rather have learned their lesson when they were quite young. They realise just how important it is not to make a major mistake later on in their lives.
DM Do you think it’s immoral to avoid your taxes?
RB I think that obviously everybody should pay their taxes. I think every single company will take advice. Our English companies will pay British taxes, our overseas companies will pay overseas taxes and lawyers will tell us how to mitigate taxes as much as possible. Every company will take that kind of advice. And not to take that advice leaves you uncompetitive. So I think it’s a balancing act and I think generally you don’t do anything that’s illegal. Governments set the rules and you live by the rules.
DM The institutions that went into Northern Rock in the 1990s were two north-east building societies that went back to the 1850s. Do you think we have lost something with demutualisation?
RB I think that capitalism, with all its flaws, works better than the nationalised businesses, and that mutualisation [makes you] slightly closer to being a nationalised institution than a capitalist institution.
DM Do you think that the people who are running Barclays are right to resign?
RB I don’t know. Barclays was one of the banks that didn’t go to the government for money.
From what I know about Bob Diamond from afar, he’s a spectacularly good operator. It’s a great, great loss for the bank and obviously a great personal loss for him, and if he went too far obviously he’ll regret it for the rest of his life.
DM Thinking about Britain, what is our biggest problem?
RB I think the kinds of things I’ll come up with apply to any European country, not just Great Britain. Governments worldwide are spending more than they’re making. So, if you take the army, air force and navy, it would seem to make great sense for us to try to work as one in Europe. We’d end up having a much more powerful army, maybe an air force to try to defend the continent as a whole, and would reduce cost dramatically by working with the rest of Europe. I suspect that we will end up going to war less often because we will know that Europe is that much stronger when it comes to defence and we will save a lot of money.
Every single aspect should be looked at. Radio 1, for instance. As much as it’s great to have the BBC as a public-service operator, if you privatised Radio 1, gave it strict remits, put the money back into the rest of the BBC, that would help fund the public-service aspect of the BBC and it would make sense. On education, we need to ask: what kind of people do we need for society? French is one of the principal languages being taught in school, but it’s a difficult language to learn, and not that useful. Obviously Spanish would be much more useful. So why are we wasting our time on it?
DM Are you sorry you didn’t go to university, or do you think you did fine without it?
RB My university education was out in the jungle. Talking to my kids, Holly in particular, who did go to university, [I feel] people need to sit back and rethink it. A lot of courses only need to be two-year or even 18-month courses.
DM Do you think the government’s economic strategy is working?
RB I think that they’ve been brave in doing what they’re doing. The jury is still out as to whether it will succeed. We had to reduce government expenditure at some stage. They’ve chosen earlier than some other countries and I think the jury is still out as to whether this experiment is going to be successful or not, but I think it was an experiment worth trying.
DM People like me have argued that we’re sucking so much demand out of the economy, we are going to get stuck in a vicious circle.
RB What I do believe is that, at the same time as reducing expenditure on non-productive aspects
of government, we’ve got to be investing in big infrastructure products which will pay their way in the economy in the longer run. Aviation is a disgrace. Governments are terrified; all three parties have decided to take the cowardly approach and pretend that aviation doesn’t exist.
DM Do you think politicians need to be braver about immigration as well?
RB The wonderful thing about the European Union is our flexibility to live anywhere in the Union. So, yeah, we should be encouraging more students, we should be encouraging more people to come and live in Britain.
DM Just before the last election you associated yourself with some of the policies of the Tory party. What do you think Labour has to do to win back business support for the next election?
RB I’ve never actually backed any political party because I think that for business people to associate themselves with different political parties is invidious for the party itself and I think it’s
invidious for the business person. I will definitely speak out on issues where I agree or disagree with governments.
I do think that business people should stay well clear of supporting individual political parties. And I think the unions should stay well clear as well and that there should be a different system of funding parties than currently exists.
DM What is your view about income inequality and the responsibilities of wealthy people towards the rest of society?
RB I think that one of the flaws of capitalism is that if you’re a top-30 tennis player, extreme wealth goes with it; if you’re 100 or below, you’re struggling. Extreme responsibility goes with that, so there is a responsibility to utilise that wealth – not just have it sitting in bank accounts but to get out there, create new wealth, invest in creating new jobs, invest in tackling some of the world’s problems.
DM Are you going to follow Warren Buffett and give away all your money in your will?
RB I will be giving away a considerable amount of money in my will, but the way I would want to give it away is to make sure that the people who then spend it, spend it as judiciously in making a difference as I have done. We try to run Virgin Unite [the non-profit foundation of the Virgin Group] in a very entrepreneurial way, so we set up organisations like the Carbon War Room to tackle global warming. Whether I give away everything or whether we give away a percentage, we are yet to decide.
DM You have said that racism is the greatest sin. What was behind that sentiment?
RB I should think I’ve had the privilege of travelling the world more than almost anybody else, and the world is full of incredible, delightful people of all creeds and races.
It is unbelievable to think that, when I first went to South Africa, there were lavatories for white people and lavatories for black people and that Archbishop Tutu would have had to have gone to the black lavatory. And, having overthrown the white man, what a fantastic example to the world in setting up a Truth and Reconciliation Commission to forgive your enemies. Great Britain is the richer for its wonderful mixture of people and its wonderful diversity of cultures.
DM And what is the world’s big­gest problem today?
RB We are running out of oil. I think that if a government was to say, “In 2020, we’re going to be self-sufficient in fuel, we’re not going to import any more oil” and you worked back from that, you could create thousands and thousands of jobs.
The reason we set up the Carbon War Room was that, initially, if governments can’t set the rules, business has got to get on. All the profits we make from our airlines we are investing in clean fuels. So
I think in five years’ time the aviation industry will go from being one of the dirtiest industries to one of the cleanest industries in the world. It would certainly be helpful if governments would get their act together and create global rules. If they can do that with industry working with them, we are still not too late to get on top of the problem.
DM Are you getting back to Britain for the Olympics?
RB I would love to, but I seem to be travelling.
DM You’re not a late entry to the kitesurfing competition?
RB Oh, the kitesurfing! I’m actually going to be preparing for Rio for that one.

David Miliband is the president and CEO of the International Rescue Committee. He was UK foreign secretary from 2007 until 2010.

This article first appeared in the 16 July 2012 issue of the New Statesman, Age of Crisis